Japan follows China, India into Africa

East African Business Week,

Published: June 27, 2008

Author:

Hany Besada

Japan has pledged more than $1.9 billion to Africa over the next five years. The announcement was made on the first day of a timely Japan-Africa summit in Yokohama. Japan's Prime Minister, Yasuo Fukuda, promised a further $4 billion in soft loans over the same period to help improve infrastructure on the continent, and a $2.5 billion fund through the Japan Bank for International Cooperation, designed to expand his country's investment in Africa.

This comes hot on the heels of increased pressure, both internally and externally, for Japan to expand relations with Africa, given the recent media frenzy surrounding China's ascendancy in Africa in recent years. With Japan lagging far behind China in its trade and investment efforts in Africa, this announcement is seen as a concerted effort to answer critics with regard to the country's waning influence in, and commitment to the continent's development since the early 1980s.

Japanese leaders know all too well that they will have their work cut out for them if Japan is to catch up with India, let alone China, in terms of the total volume of trade and investment in Africa. India, following closely in the footsteps of China, announced a $500 million grant for development, a further $5 billion in credit to Africa, as well as a formal agreement, comprising 131 projects, reportedly worth over $10 billion.

These announcements, made at last month's first India-Africa Forum Summit, reflect New Delhi's eagerness, not only to deepen its engagement and raise its profile with the resource-endowed continent but, more importantly, to catch up with to China, as the latter is tightening its foothold on the continent.

China's involvement in Africa has elicited strong concern from its Asian neighbors, but also criticism, not only from the West, but from Africa as well. Indeed, many in the West, and increasingly in Africa, are questioning the motives behind China's extraordinary level of interest in the world's poorest region.

In recent months, Chinese investments have sparked controversy and public protests over alleged poor working conditions and low pay by Chinese firms in both Zambia and Namibia. Moreover, Chinese companies have been accused of selling very cheap, inferior consumer goods, which have left local entrepreneurs at a major disadvantage. This has sparked public outcry in a number of states, particularly those less endowed with mineral resources.

In Lesotho, local street vendors attacked Chinese-owned businesses in November 2007. They threw rocks and chanted anti-Chinese slogans, accusing Chinese investors of colluding with government to force them out of the city center of the country's capital, Maseru.

Critics are pointing out the potential long-term negative impact of China's growing economic interest in Africa.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

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